HOT OFF THE WIRE

Spectra Energy Reports Third Quarter 2012 Results

              Spectra Energy Reports Third Quarter 2012 Results

- Reported net income from controlling interests of $179 million, $0.27
earnings per share (EPS), compared with $254 million, $0.39 EPS, in the prior
year quarter.

- Third quarter 2012 earnings in line with company expectations, except for
the effects of lower commodity prices.

- Lower commodity prices expected to affect full year results; remain focused
on longer term with at least $20 billion in expansion opportunities through
the end of the decade.

- Quarterly dividend increased to $0.305 per share - representing a $0.10 or
8.9 percent increase in annual dividend.

PR Newswire

HOUSTON, Nov. 1, 2012

HOUSTON, Nov. 1, 2012 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) reported
2012 third quarter net income from controlling interests of $179 million, or
$0.27 diluted EPS, compared with $254 million, $0.39 diluted EPS, in the prior
year quarter. Ongoing net income from controlling interests for the 2012
quarter was $179 million, or $0.27 diluted EPS, versus $247 million, $0.38
diluted EPS, in the prior year quarter.

(Logo: http://photos.prnewswire.com/prnh/20061030/CLM051LOGO )

"Spectra Energy's fee-based businesses continued to generate strong earnings
and cash flows, helping to lessen the effects of lower commodity prices," said
Greg Ebel, president and chief executive officer, Spectra Energy Corp.

"Industry fundamentals and our commitment to delivering superior total
shareholder return remain strong, as underlined by our action to increase the
quarterly dividend, effective with the fourth quarter 2012 payment. Looking
ahead, we remain confident in our ability to secure and deliver growth for our
investors through realizing at least $20 billion in expansion projects by the
end of the decade," he said.

BUSINESS EXPANSION UPDATES

Currently, Spectra Energy is executing on $8 billion of expansion projects,
and the company is already realizing benefits from projects going into
service. In the U.S., the Philadelphia Lateral and TEAM 2012 projects are now
in service and generating revenues. Additionally, the NJ-NY Expansion kicked
off construction in the third quarter and is on track to enter service in late
2013.

In Western Canada, the T-North 2012 Project is slated for a fourth quarter
2012 in-service, and construction of the Fort Nelson North plant will be
completed in the fourth quarter of 2012, with the project going into service
early next year.

Spectra Energy also recently announced an agreement in principle to acquire a
one-third interest in the Sand Hills and Southern Hills Pipelines, both of
which are currently under construction by DCP Midstream LLC (DCP Midstream), a
50/50 joint venture between Spectra Energy and Phillips 66. The transaction
is expected to close by the end of November. Upon closing, Spectra Energy,
Phillips 66, and DCP Midstream each will own a one-third interest in the two
natural gas liquids pipelines.

The company also has made good progress on its $20 billion project backlog.
During the third quarter, Spectra Energy entered an agreement with partners
DTE Energy and Enbridge to build the NEXUS project, which will move growing
supplies of Ohio Utica shale gas to markets in Ohio, Michigan and Ontario,
Canada. The agreement also provides Spectra Energy a 20-percent ownership in
Vector Pipeline upon completion of the project. Spectra Energy's AIM project,
which will expand capacity of the company's Algonquin system, is in the midst
of an open season and is receiving high levels of interest. And lastly, in
Western Canada, Spectra Energy recently announced plans to jointly develop,
with BG Group, a new natural gas pipeline from northeast B.C. to BG Group's
proposed LNG export facility in Prince Rupert. This new opportunity will
leverage surplus B.C. natural gas supplies and facilitate its export to
high-demand international markets.

SEGMENT RESULTS

U.S. Transmission

U.S. Transmission reported third quarter 2012 earnings before interest and
taxes (EBIT) of $238 million, compared with $235 million in third quarter
2011. Quarterly EBIT results reflect increased earnings from expansions and
lower operating costs. These benefits were partially offset by lower
processing revenues and, as anticipated, lower storage revenues.

Distribution

Distribution reported third quarter 2012 EBIT of $55 million, compared with
$50 million in third quarter 2011 mainly due to higher short-term
transportation revenues.

Western Canada Transmission & Processing

Western Canada Transmission & Processing reported third quarter 2012 EBIT of
$83 million, compared with $119 million in third quarter 2011. This $36
million decrease in EBIT was driven by a $43 million reduction at the Empress
natural gas liquids business, attributable to lower NGL prices. These results
were partially offset by improved results in the gathering and processing
business, driven by higher contracted volumes from expansions in the Horn
River and Montney areas of British Columbia.

Field Services

Field Services reported third quarter 2012 EBIT of $62 million, compared with
$134 million in third quarter 2011. This $72 million decrease in EBIT was
driven by an approximately $90 million reduction due to lower natural gas
liquids and natural gas prices. Also reducing EBIT were higher planned repairs
and maintenance costs as a result of asset growth. Partially offsetting these
reductions were gains associated with unit issuances by DCP Midstream's master
limited partnership and a reduction in depreciation expense, as previously
reported.

During the third quarters of 2012 and 2011, respectively, NGL prices averaged
$0.72 per gallon versus $1.24 per gallon, NYMEX natural gas averaged $2.81 per
million British thermal units (MMBtu) versus $4.19 per MMBtu, and crude oil
averaged approximately $92 per barrel versus approximately $90 per barrel.

DCP Midstream paid distributions of $25 million to Spectra Energy in third
quarter 2012.

Other

"Other" reported net costs of $29 million and $23 million in the third quarter
2012 and 2011, respectively. Other is comprised primarily of corporate costs,
including benefits and captive insurance.

Interest Expense

Interest expense was $159 million for third quarter 2012, compared with $157
million for third quarter 2011.

Income Taxes

Third quarter 2012 income tax expense from continuing operations was $72
million, compared with $108 million reported in the third quarter of 2011.
The lower tax expense was driven by lower earnings and a lower Canadian
effective tax rate. The effective tax rate was 26 percent in the third
quarter of 2012, compared with 28 percent in the third quarter of 2011.

Reconciliation of Reported to Ongoing Net Income – Controlling Interests

( in millions)
                                                       Quarters Ended

                                                       September 30,
                                                       2012        2011
Net Income – Controlling Interests as Reported         $    179 $    254
Adjustments to Reported Net Income – Controlling
Interests:
Discontinued Operations                                –           (7)
Ongoing Net Income – Controlling Interests             $    179 $    247



Reconciliation of Reported to Ongoing Diluted EPS
                             Quarters Ended

                             September 30,
                             2012          2011
Diluted EPS as Reported      $    0.27 $    0.39
 Discontinued Operations –             (0.01)
Diluted EPS, Ongoing         $    0.27  $    0.38

Additional Information

Additional information about third quarter 2012 earnings can be obtained via
the Spectra Energy Web site: www.spectraenergy.com.

The analyst call is scheduled for today, Thursday, November 1, 2012, at 8:00
a.m. CT. The webcast can be accessed via the Investors Section of Spectra
Energy's Web site or the conference call can be accessed by dialing (888)
252-3715 in the United States or Canada, or (706) 634-8942 for International.
The conference code is "40011318" or "Spectra Energy Quarterly Earnings Call."

Please call five to ten minutes prior to the scheduled start time. A replay of
the call will be available until 5:00 p.m. CT, February 1, 2013, by dialing
(855) 859-2056. The international replay number is(706) 634-8942, with above
conference ID. A replay and transcript also will be available by accessing
theInvestors Section of the company's Web site.

Non-GAAP Financial Measures

We use ongoing net income from controlling interests and ongoing diluted EPS
as measures to evaluate operations of the company. These measures are
non-GAAP financial measures as they represent net income from controlling
interests and diluted EPS, adjusted for special items and discontinued
operations. Special items represent certain charges and credits which we
believe will not be recurring on a regular basis, and discontinued operations
do not represent our ongoing core business. We believe that the presentation
of ongoing net income and ongoing diluted EPS provide useful information to
investors, as it allows them to more accurately compare our ongoing
performance across periods.

The primary performance measure used by us to evaluate segment performance is
segment EBIT from continuing operations, which at the segment level represents
earnings from continuing operations (both operating and non-operating) before
interest and taxes, net of noncontrolling interests related to those earnings.
We consider segment EBIT, which is the GAAP measure used to report segment
results, to be a good indicator of each segment's operating performance from
its continuing operations as it represents the results of our ownership
interest in operations without regard to financing methods or capital
structures.

We also use ongoing segment EBIT and Other EBIT (net costs) as measures of
performance. Ongoing segment and Other EBIT are non-GAAP financial measures as
they represent reported segment and Other EBIT adjusted for special items. We
believe that the presentation of ongoing segment and Other EBIT provide useful
information to investors, as they allow investors to more accurately compare a
segment's or Other's ongoing performance across periods. The most directly
comparable GAAP measures for ongoing segment or Other EBIT are reported
segment or Other EBIT, which represent EBIT from continuing operations,
including any special items.

Forward-Looking Statements

This release includes "forward-looking statements" within the meaning of
Section27A of the Securities Act of 1933 and Section21E of the Securities
Exchange Act of 1934. Forward-looking statements are based on our beliefs and
assumptions. These forward-looking statements are identified by terms and
phrases such as: anticipate, believe, intend, estimate, expect, continue,
should, could, may, plan, project, predict, will, potential, forecast, and
similar expressions. Forward-looking statements involve risks and
uncertainties that may cause actual results to be materially different from
the results predicted. Factors that could cause actual results to differ
materially from those indicated in any forward-looking statement include, but
are not limited to: state, federal and foreign legislative and regulatory
initiatives that affect cost and investment recovery, have an effect on rate
structure, and affect the speed at and degree to which competition enters the
natural gas industries; outcomes of litigation and regulatory investigations,
proceedings or inquiries; weather and other natural phenomena, including the
economic, operational and other effects of hurricanes and storms; the timing
and extent of changes in commodity prices, interest rates and foreign currency
exchange rates; general economic conditions, including the risk of a prolonged
economic slowdown or decline, or the risk of delay in a recovery, which can
affect the long-term demand for natural gas and related services; potential
effects arising from terrorist attacks and any consequential or other
hostilities; changes in environmental, safety and other laws and regulations;
results and costs of financing efforts, including the ability to obtain
financing on favorable terms, which can be affected by various factors,
including credit ratings and general market and economic conditions; increases
in the cost of goods and services required to complete capital projects;
declines in the market prices of equity and debt securities and resulting
funding requirements for defined benefit pension plans; growth in
opportunities, including the timing and success of efforts to develop U.S. and
Canadian pipeline, storage, gathering, processing and other infrastructure
projects and the effects of competition; the performance of natural gas
transmission and storage, distribution, and gathering and processing
facilities; the extent of success in connecting natural gas supplies to
gathering, processing and transmission systems and in connecting to expanding
gas markets; the effects of accounting pronouncements issued periodically by
accounting standard-setting bodies; conditions of the capital markets during
the periods covered by the forward-looking statements; and the ability to
successfully complete merger, acquisition or divestiture plans; regulatory or
other limitations imposed as a result of a merger, acquisition or divestiture;
and the success of the business following a merger, acquisition or
divestiture. These factors, as well as additional factors that could affect
our forward-looking statements, are described under the headings "Risk
Factors" and "Cautionary Statement Regarding Forward-Looking Information" in
our 2011 Form 10-K, filed on February 27, 2012, and in our other filings made
with the Securities and Exchange Commission (SEC), which are available via the
SEC's Web site at www.sec.gov. In light of these risks, uncertainties and
assumptions, the events described in the forward-looking statements might not
occur or might occur to a different extent or at a different time than we have
described. All forward-looking statements in this release are made as of the
date hereof and we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North
America's premier natural gas infrastructure companies serving three key links
in the natural gas value chain: gathering and processing, transmission and
storage, and distribution. For more than a century, Spectra Energy and its
predecessor companies have developed critically important pipelines and
related infrastructure connecting natural gas supply sources to premium
markets. Based in Houston, Texas, the company's operations in the United
States and Canada include more than 19,000 miles of transmission pipeline,
approximately 305 billion cubic feet of storage, as well as natural gas
gathering and processing, natural gas liquids and local distribution
operations. The company also has a 50 percent ownership in DCP Midstream, one
of the largest natural gas gatherers and processors in the United States.
Spectra Energy is a member of the Dow Jones Sustainability World and North
America Indexes and the Carbon Disclosure Project's Global 500 and S&P 500
Carbon Disclosure Leadership Indexes. For more information, visit
www.spectraenergy.com.

Spectra Energy Corp
Quarterly Highlights
September 2012
(Unaudited)
(In millions, except per-share amounts and where noted)
                          Three Months Ended      Nine Months Ended
                          September 30,            September 30,
                          2012         2011        2012           2011
COMMON STOCK DATA
Earnings Per Share From                            $         $     
Continuing Operations,    $  0.27     $  0.38     1.11         1.34
Diluted
Earnings Per Share,       $  0.27     $  0.39    $         $     
Diluted                                             1.11         1.37
Dividends Per Share       $  0.28     $  0.26    $         $     
                                                    0.84         0.78
Weighted-Average Shares   655          652         655            652
Outstanding, Diluted
INCOME
Operating Revenues        $ 1,072      $ 1,123     $         $    
                                                   3,728          3,923
Total Reportable Segment  438          538         1,563          1,788
EBIT
Income from Discontinued  -            7           2              23
Operations, Net of Tax
Net Income - Controlling  179          254         727            895
Interests
EBIT BY BUSINESS SEGMENT
U.S. Transmission        $  238     $  235    $         $     
                                                    746          757
Distribution              55           50          281            305
Western Canada            83           119         315            373
Transmission & Processing
Field Services            62           134         221            353
Total Reportable Segment  438          538         1,563          1,788
EBIT
Other EBIT                (29)         (23)        (83)           (76)
 Total Reportable       $  409     $  515    $         $    
Segment and Other EBIT                             1,480          1,712
CAPITAL AND INVESTMENT
EXPENDITURES
U.S. Transmission                                  $         $     
                                                    651          534
Distribution                                       172            200
Western Canada                                     548            515
Transmission & Processing
Other                                              47             56
Total Capital and                                  $         $    
Investment Expenditures,                           1,418          1,305
Excluding Acquisitions
Acquisitions (a)                                   $         $     
                                                     30         390
                                                   September      December 31,
                                                   30,
                                                   2012           2011
CAPITALIZATION
Common Equity -                                    39%            39%
Controlling Interests
Noncontrolling Interests                           5%             5%
and Preferred Stock
Total Debt                                        56%            56%
Total Debt                                        $          $   
                                                   12,490         11,723
Book Value Per Share (b)                           $         $    
                                                   13.15          12.39
Actual Shares                                      653            651
Outstanding
(a) Represents 2012 payment of a portion of the purchase price previously
withheld in connection with the acquisition of Bobcat and 2011 acquisition of
Big Sandy natural gas pipeline system.
(b) Represents controlling interests.

Spectra Energy Corp
Quarterly Highlights
September 2012
(Unaudited)
(In millions, except where noted)
                                         Three Months Ended  Nine Months Ended
                                         September 30,       September 30,
                                         2012       2011     2012      2011
U.S. TRANSMISSION
 Operating Revenues                     $      $     $       $ 
                                          460       471   1,419     1,411
 Operating Expenses
Operating, Maintenance and Other         165        184      484       486
Depreciation and Amortization            70         69       211       203
 Gains on Sales of Other Assets and     -          4        3         8
Other, net
 Other Income and Expenses              40         40       103       103
 Noncontrolling Interests               27         27       84        76
 EBIT                                   $      $     $      $   
                                          238       235   746      757
 Proportional Throughput, TBtu (a)      650        659      2,025     2,085
DISTRIBUTION
 Operating Revenues                     $      $     $       $ 
                                          269       276   1,188     1,347
 Operating Expenses
Natural Gas Purchased                    50         60       425       556
Operating, Maintenance and Other         110        112      323       326
Depreciation and Amortization            54         54       159       160
 EBIT                                   $      $     $      $   
                                           55       50  281      305
 Number of Customers, Thousands                             1,370     1,352
 Heating Degree Days, Fahrenheit        295        246      3,994     4,948
 Pipeline Throughput, TBtu             158        139      584       626
 Canadian Dollar Exchange Rate,         1.00       0.98     1.00      0.98
Average
WESTERN CANADA TRANSMISSION &
PROCESSING
 Operating Revenues                     $      $     $       $ 
                                          348       392   1,143     1,202
 Operating Expenses
Natural Gas and Petroleum Products       81         86       304       275
Purchased
Operating, Maintenance and Other         142        148      406       428
Depreciation and Amortization            50         46       145       140
 Other Income and Expenses              8          7        27        14
 EBIT                                   $      $     $      $   
                                           83      119   315      373
 Pipeline Throughput, TBtu              158        180      490       529
 Volumes Processed, TBtu                162        187      501       537
 Empress Inlet Volumes, TBtu           121        145      401       455
 Canadian Dollar Exchange Rate,         1.00       0.98     1.00      0.98
Average
FIELD SERVICES
 Equity in Earnings of DCP Midstream,   $      $     $      $   
LLC                                        62      134   221      353
 EBIT                                   $      $     $      $   
                                           62      134   221      353
 Natural Gas Gathered and               7.2        7.1      7.1       6.9
Processed/Transported, TBtu/day (b)
 Natural Gas Liquids Production,        398        392      401       375
MBbl/d (b,c)
 Average Natural Gas Price Per MMBtu    $      $     $      $  
(d)                                      2.81       4.19   2.59      4.21
 Average Natural Gas Liquids Price Per  $      $     $      $  
Gallon (e)                               0.72       1.24   0.83      1.21
 Average Crude Oil Price Per Barrel     $       $     $       $ 
(f)                                      92.22     89.76    96.17     95.48
(a) Trillion British thermal units
(b) Includes 100% of DCP Midstream volumes
(c) Thousand barrels per day
(d) Million British thermal units. Average price based on NYMEX Henry Hub
(e) Does not reflect results of commodity hedges
(f) Average price based on NYMEX calendar month

Spectra Energy Corp
Condensed Consolidated Statements of Operations
(Unaudited)
(In millions)
                                  Three Months Ended     Nine Months Ended
                                  September 30,          September 30,
                                  2012        2011       2012       2011
Operating Revenues                $         $         $         $   
                                  1,072      1,123     3,728     3,923
Operating Expenses                744         765        2,516      2,610
Gains on Sales of Other Assets    -           3          2          7
and Other, net
Operating Income                  328         361        1,214      1,320
Other Income and Expenses         107         178        350        470
Interest Expense                  159         157        471        471
Earnings From Continuing          276         382        1,093      1,319
Operations Before Income Taxes
Income Tax Expense From           72          108        289        372
Continuing Operations
Income From Continuing            204         274        804        947
Operations
Income From Discontinued          -           7          2          23
Operations, net of tax
Net Income                        204         281        806        970
Net Income - Noncontrolling       25          27         79         75
Interests
Net Income - Controlling          $       $       $       $    
Interests                         179         254        727         895



Spectra Energy Corp
Condensed Consolidated Balance Sheets
(Unaudited)
(In millions)
                                       September 30,      December 31,
                                       2012               2011
ASSETS
Current Assets                        $          $        
                                       1,621              1,764
Investments and Other Assets           7,127              7,014
Net Property, Plant and Equipment     19,607             18,258
Regulatory Assets and Deferred Debits  1,227              1,102
Total Assets                           $           $       
                                       29,582             28,138
LIABILITIES AND EQUITY
Current Liabilities                    $          $        
                                       4,023              3,101
Long-term Debt                         9,892              10,146
Deferred Credits and Other             5,991              5,737
Liabilities
Preferred Stock of Subsidiaries        258                258
Equity                                 9,418              8,896
Total Liabilities and Equity           $           $       
                                       29,582             28,138

Spectra Energy Corp
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
                                                    Nine Months Ended
                                                    September 30,
                                                    2012         2011
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                        $    806  $    970
 Adjustments to reconcile net income to net cash
 provided by
      operating activities                          648          717
             Net cash provided by operating         1,454        1,687
             activities
CASH FLOWS FROM INVESTING ACTIVITIES
             Net cash used in investing activities  (1,450)      (1,546)
CASH FLOWS FROM FINANCING ACTIVITIES
             Net cash used in financing activities  (35)         (188)
             Effect of exchange rate changes on     3            (9)
             cash
 Net decrease in cash and cash equivalents          (28)         (56)
 Cash and cash equivalents at beginning of period   174          130
 Cash and cash equivalents at end of period         $    146  $     74

Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
September 2012 Quarter-to-date
(In millions, except per-share amounts)
                                                Reported Earnings/

                                                Ongoing Earnings
SEGMENT EARNINGS BEFORE INTEREST AND TAXES
 FROM CONTINUING OPERATIONS
U.S. Transmission                               $              
                                                           238
Distribution                                    55
Western Canada Transmission & Processing        83
Field Services                                  62
 Total Reportable Segment EBIT               438
Other                                           (29)
 Total Reportable Segment and Other EBIT     $              
                                                           409
EARNINGS
Total Reportable Segment EBIT and Other EBIT    $              
                                                           409
Interest Expense                                (159)
Interest Income and Other                       26
Income Taxes from Continuing Operations         (72)
Total Net Income                                $              
                                                           204
Total Net Income - Noncontrolling Interests    (25)
Total Net Income - Controlling Interests       $              
                                                           179
EARNINGS PER SHARE, BASIC                       $              
                                                           0.27
EARNINGS PER SHARE, DILUTED                     $              
                                                           0.27
Weighted Average Shares (reported and ongoing)
- in millions
              Basic              653
              Diluted            655



Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
September 2011 Quarter-to-date
(In millions, except per-share amounts)
                                       Reported   Discontinued       Ongoing
                                       Earnings   Operations         Earnings
SEGMENT EARNINGS BEFORE INTEREST AND
TAXES
 FROM CONTINUING OPERATIONS
                                       $      $           $    
U.S. Transmission                                 -             
                                       235                          235
Distribution                           50         -                  50
Western Canada Transmission &          119        -                  119
Processing
Field Services                         134        -                  134
 Total Reportable Segment           538        -                  538
EBIT
Other                                  (23)       -                  (23)
 Total Reportable Segment and       $      $           $    
Other EBIT                                        -             
                                       515                          515
EARNINGS
Total Reportable Segment EBIT and      $      $           $    
Other EBIT                                        -             
                                       515                          515
Interest Expense                       (157)      -                  (157)
Interest Income and Other              24         -                  24
Income Taxes from Continuing           (108)      -                  (108)
Operations
Discontinued Operations, net of        7          (7)              A -
Tax
                                       $      $           $    
Total Net Income                                (7)             
                                       281                          274
Total Net Income - Noncontrolling      (27)       -                  (27)
Interests
Total Net Income - Controlling         $      $           $    
Interests                                       (7)             
                                       254                          247
                                       $      $           $    
EARNINGS PER SHARE, BASIC                      (0.01)              
                                       0.39                          0.38
                                       $      $           $    
EARNINGS PER SHARE, DILUTED                    (0.01)              
                                       0.39                          0.38
A - Primarily net revenues from
Sonatrach settlement transactions.
Weighted Average Shares (reported and
ongoing) - in millions
                    Basic         650
                    Diluted       652

SOURCE Spectra Energy Corp

Website: http://www.spectraenergy.com
Contact: Media: Caitlin Currie, +1-713-627-5353, +1-713-627-4747 (24-hour
media line); or Analysts: John Arensdorf, +1-713-627-4600
 
Press spacebar to pause and continue. Press esc to stop.